Christie budget faces $444 million revenue shortfall, report says

The projected revenue shortfall in Governor Christie’s budget has grown to $444 million with only weeks left in the fiscal year, according to a non-partisan legislative budget analyst.

David Rosen of the Office of Legislative Services told members of Senate Budget Committee this morning that the state hasn’t collected as much tax revenue from energy consumption as it originally forecast, forcing him to lower the revenue estimate in that category by $200 million.

Rosen made other adjustments to several other revenue categories, with 11 being lowered to some degree.

“The April surprise this year is that there was no April surprise,” he said. “Unlike some other years, collections for the personal and corporate income taxes did not significantly exceed or miss our targets.”

He also raised concern about payments the state is hoping to receive from outside sources by the end of the fiscal year on June 30, including $160 million in local affordable housing funds and $120 million from a privatization of some state lottery functions. Both payments may be held up by litigation.

“If we don’t get either of those it will be an additional shortfall,” he said.

Rosen also released his projections for the fiscal year that begins on July 1, saying he is $492 million below what Christie estimated when he proposed a $32.9 billion spending plan back in February.

The key differences are in energy tax collections and the amount the Christie administration expects to collect when New Jersey begins allowing online gambling as early as later this year.

On theonline gambling projection, Rosen said: “We are assuming only a $30 million revenue gain in FY2014 — $150 million below the Executive (Branch) forecast.”

State Treasurer Andrew Sidamon-Eristoff is scheduled to update the committee this afternoon on the Christie administration’s forecast for both the remainder of the current fiscal year and for the new fiscal year.

“We disagree with Rosen’s assessment, and the Treasurer will be discussing his projections today with the budget committee,” said Christie spokesman Michael Drewniak.

If Sidamon-Eristoff also plans to downgrade the revenue forecast, something he already did back in Ferbruary, it could mean last-minute spending cuts or some other adjustment because the state constitution requires a balanced budget. The administration has already pushed back property tax relief to August this year to keep the budget in balance.

Faced with a similar predicament last year, the Christie administration raided some funds and decided to abandon a plan to rely less on borrowing for long-term transportation infrastructure upgrades.

Last week, the administration released revenue figures for the month of April that indicated the state met tax collections targets and had collected nearly 7 percent more in revenue ten months into the fiscal year than the prior fiscal year. But Christie projected more widespread growth last June when he signed a $31.7 billion spending plan, bringing on the potential for revenue shortfalls.

Sen. Jennifer Beck, R-Monmouth, said lawmakers shouldn’t discount just how much progress has been made in the state’s econ0my despite Rosen’s projected shortfall.

“We’re moving in the right direction and we’re seeing revenue growth,” she said.